Nokia on the ropes as analysts slash targets

Analysts predicted more gloom ahead for Nokia on Wednesday and the struggling phone maker was forced to deny talk it would sell its core business to Microsoft.
A day after the latest in a string of profit warnings from what was once the industry number one, the stock fell as much as 10 percent to a 13 year low, compounding Wednesday's 18 percent fall, before recovering sharply to close just 0.8 percent lower at 4.71 euros on talk of the buyout.
The recovery took place in heavy volume in late trading and was sparked by a web site report that said its software partner Microsoft would buy out its phones business for $19 billion.
Nokia called the report "100 percent baseless". Microsoft declined to comment. Nokia said on Tuesday mobile phone sales in the second quarter would be substantially below a previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.
Part of the predicted decline was expected as Nokia is moving to Microsoft Corp's Windows software from its own Symbian platform, a plan set three months ago by new Chief Executive Stephen Elop. But customers are fleeing faster than expected. Analysts said they were not sure if the company can catch up even after it starts selling Windows-based phones in the fourth quarter.
"We would continue to avoid the stock as Symbian smartphone sales are falling off faster than expected, and we are sceptical that new Windows Phone models will be able to replace lost profits," said Gleacher & Co analyst Stephen Patel.
The company faces tough competition from Apple Inc and Google Inc as well as lower-end handset makers. In a sign of worse to come, mobile operators in Europe told Reuters that Nokia's new Symbian phones - a stopgap until the end of the year - were of little interest. European operators are seen crucial to the success of devices in the region because of the subsidies they provide.